Standardisation based on patent-protected technologies is a key contributor to industrial innovation and competitiveness. The European Commission supports the improvement of the framework governing the inclusion of patent-protected technologies into standards and the facilitation of the licensing process for these technologies.

What is the relationship between patents and standards?

Patents provide incentives for research and development, and facilitate knowledge transfers. Standards ensure the rapid diffusion of technologies and the interoperability between products.

Many standards are based on patented technologies. For example, the mobile telecommunications industry is driven by a heavy reliance on standardisation, which is made up of a great number of innovations protected by patents. 2G (GSM), 3G (UMTS), 4G (LTE) and WiFi networks rely on hundreds of patented technologies to work. Such communication standards are also key for the development of the hyper-connected society, for example in the field of the Internet of Things in sectors such as consumer electronics, the automotive industry and the electricity grid industry.

Organisations engaged in standard setting have developed rules and practices to ensure the efficient licensing of patents that are essential for their standards ('standard-essential patents'). A smooth licensing environment is essential to the success of a standard. It helps to achieve broad and rapid diffusion of innovation and to give patent holders an adequate return on investment in research and development (R&D). It also gives all users of the standard fair access at a reasonable cost.

What the Commission is doing

To ensure that Europe is well positioned in today’s competitive global environment, the Commission supports a smooth and balanced functioning of the system for standards that comprise patent-protected technologies. This includes removing unnecessary barriers in the market for the licensing of standard-essential patents (SEPs).

Communication, 'Setting out the EU approach to Standard Essential Patents'

In November 2017 the Commission adopted, as part of the IP package on enforcement, the Communication, 'Setting out the EU approach to Standard Essential Patents'. It provides for a clearer framework to incentivise the development of, and ease the access to key technologies that enable interconnection and connectivity. Stakeholders will have better legal certainty for the development and licensing of technologies required for the hyper-connected society. The Communication covers 3 key aspects of standard-essential patents. It

contributes to a more transparent environment for negotiations between SEP holders and potential licensees

proposes common valuation principles for SEPs technology

suggests ideas for a balanced and predictable enforcement regime

Studies to assess the interplay between standardisation and patents

In 2017 the Commission published the study, 'Licensing terms of Standard Essential Patents - A comprehensive analysis of cases'. It aims to provide a consistent framework for both the interpretation of FRAND (Fair, Reasonable and Non-Discriminatory terms) committments and the definition of FRAND royalties.

In December 2016, the Commission published 3 studies on SEPs. The first study evaluates issues and solutions related to SEPs and the standardisation process. It also covers standardisation challenges in the Internet of Things industries. The second study provides statistical evidence on the importance of SEPs on key technologies in Europe. A third study addresses patent assertion entities in Europe, focussing on their impact on innovation and knowledge transfer in ICT markets.

how the framework should evolve to ensure that standardisation remains efficient and well-adapted to a fast-changing economic and technological environment

Study on patents and standards

In 2013, the Commission undertook a fact-finding study on the issue. The study analyses the rules and practices developed to ensure the licensing of standard-essential patents. It examines barriers to efficient licensing and recommendations from stakeholders on dealing with these barriers.